Nio Falls Despite Beating Views; Tesla China Sales Started To Recover In May

China-based electric-vehicle maker child (CHILD) reported better-than-expected first-quarter earnings early Thursday and implied a big jump in June deliveries as Covid lockdown woes end. Meanwhile, Tesla (TSLA) China sales numbers showed a big improvement vs. April, with indications that full production and deliveries should return in June. Nio stock fell early Thursday while Tesla stock rose.


Child Earnings

estimates: Wall Street expected Nio to post a 14-cents-a-share loss in Q1. Sales were seen coming in at $1.512 billion, a 23% increase from the year-ago period, according to FactSet.

Results: Nio reported a first-quarter loss of 13 cents a share vs. a 4-cent loss a year earlier. Revenue climbed 24% to $1.56 billion. Nio already reported deliveries of 25,768 vehicles in Q1, a 28% year-over-year increase and a 3% increase from Q4 last year.

Outlook: Nio sees Q2 deliveries of 23,000-25,000, up 5%-14% vs. a year earlier, but down slightly from Q1. Nio has already reported EV deliveries of 5,074 in April and 7,024 in May, so that forecast implies June deliveries of roughly 10,900-12,900, as Nio production rebounds toward pre-lockdown levels.

A recent local report said Nio operations have now returned to pre-lockdown levels. The company is also opening up Nio stores in Shanghai, its largest market.

With Shanghai opening up last week, Deutsche Bank analyst Edison Yu says Nio can finally get back on track with its product supercycle this year. “In fact, Nio has delivered 101 vehicles already in the city since (June 2), even before starting ET7 deliveries,” he wrote in a June 6 note.

Nio also sees Q2 revenue of RMB9.34 billion ($1.47 billion) and RMB10.088 billion ($1.59 billion). That would be a year-over-year gain of 10.6%-19.4% in local currency terms.

Tesla China Sales

Tesla sold 32,165 made-in China vehicles last month, well below normal, but up from just 1,512 in April. These figures are part of industrywide data from the China Passenger Car Association. Tesla Shanghai produced 33,544 vehicles vs. typical production of 60,000 vehicles or more. Still, that’s up from 10,757 in April, when the Shanghai plant was shut down for most of the month as part of citywide Covid lockdowns.

Starting on April 19, Tesla created a closed-loop setting in which workers lived at the plant to resume some production, with output reportedly picking up in late May.

Local state media reported that as of now, Tesla is back to 100% daily production, with workers still on site. Shanghai largely ended lockdowns on June 1, with Beijing recently easing restrictions.

Those are two huge markets for Tesla within China. Meanwhile, Shanghai and several local governments are introducing new subsidies to bolster EV sales for the rest of 2022.

Of the May vehicles sold, 22,340 were exported and 9,825 were sold locally. Shanghai, Tesla’s biggest market in China, only ended its Covid lockdown on June 1.

On Wednesday, at home report you quote BYD (BYDDF) executive confirming that it will supply batteries to Tesla.

Market Rally Lacks Key Trait, Indexes Fall; 5 Stocks Near Buy Points

Nio Stock, Tesla Stock

Nio shares fell nearly 6% before the open on the stock market today. Nio stock rose 3.6% to 20.35 on Wednesday, its ninth gain in 10 sessions. The stock is reclaimed 50-day line in recent days, gaining nearly 50% in the last month, according to MarketSmith.

NIO stock is still well off its 52-week high of 55.13, but its relative strength line is ticking back up again.

Tesla stock added 3.5% in premarket trade. Shares rise 1.3% to 725.60 on Thursday. TSLA stock is in a long consolidation with a 1,208.10 buy point. Shares are trading below their declining 50-day line.

Among other China-based EV makers, Xpeng (XPEV) fell 4% early Thursday while Li Auto (LI) sank 3%. Both rose Wednesdays and have been trending sharply higher in the past few weeks.

BYD stock is not yet trading Thursday. Shares rose 2.4% to 38.80, working toward 41.34 buy point from a deep base cup. Its RS line hit a new high Wednesday.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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